The Talent Revolution in Digital Marketing

The Talent Revolution in Digital Marketing

          
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The Talent Revolution in Digital Marketing

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    Looking to the Future…or Living in the Past?

    The situation does not appear set to improve in the near term. If marketing organizations are not well prepared now, they will be even less digitally capable in the future—especially in the channels where demand for up-to-date skills is likely to be greatest.

    When we asked marketers to identify their teams’ top three L&D needs for the next 12 months and the most important skills and digital channels for business success in the next three years, respondents across the board stressed strategy development and planning (an area of broad current strength). A few pointed to marketing analytics, metrics and measurement, and digital targeting, but these ran far behind the leader. Marketers attached much lower importance and priority—in some cases, troublingly low—to multiple areas related to execution, as well as to several fast-growing digital channels. (See Exhibit 4.)

    exhibit

    One might expect that the areas with big skills gaps, such as those discussed above, would be targets of concerted attention going forward. Yet when we asked marketers about their top L&D priorities for the next twelve months, video scored 43; mobile advertising, 37; display media, 27; and testing, 44.

    There are several explanations for this disconnect, including the possibility that many marketers do not have a good grasp of the importance of newer digital channels (which would also be a troubling indication of the degree of their engagement with consumers). Whatever the reason, the data clearly indicates that many marketers seem to be living in the past rather than looking to the future. They are not putting a priority on developing or improving the skills that correspond to impending areas of growth; as a result, they risk being left behind or even out of the game. In the fast-developing digital-marketing environment, backward-looking or reactive approaches to L&D will almost certainly fail to deliver the talent that companies need, especially considering the lead times required to embed new practices in the daily practice of large, multilayered organizations.

    Among the many skills and channels that appear to be in danger of receiving insufficient attention, the following are some of the most important, given current market trends.

    Mobile Advertising. The UK Advertising Association reports that spending on mobile advertising in the UK grew almost 60 percent, to £1.62 billon, in 2015. According to eMarketer, UK mobile advertising accounted for 30 percent of a total £7.3 billion in digital spending in 2014; it expects mobile advertising to become the single largest ad channel this year and to claim 40 percent of total paid media spending in the UK by 2018. Globally, mobile ad spending will reach $75 billion in 2017, according to ZenithOptimedia. Marketers feel they perform poorly at mobile advertising—and they consider it of low business importance (43) and a low priority in terms of L&D (37).

    Mobile Web and Apps. The situation is slightly better for mobile website and app development, but not by a lot. This channel scored only 48 for current performance, 56 for business importance, and 50 as a top-three L&D priority—at a time when Internet access on mobile devices has surpassed access on PCs, according to comScore. The primary experience with the Internet for an entire generation of consumers in the developed world—the 16- to 34-year-old Millennials, who outnumber the baby boomers and have a far greater degree of technical sophistication, appetite for consumption, and desire to be connected—is mobile. The vast majority of the world’s population lives in developing markets, where the Internet experience is and will continue to be mostly mobile.

    Video. Online video presents a similar dichotomy between market reality and marketer priority. The IAB UK reports that mobile video-ad spending rose 142 percent to £164 million in 2014, more than a third of total video-ad spending of £442 million (a 43 percent increase from 2013). Similarly, a recent IAB survey found that more than two-thirds of all advertisers expect to increase digital video-ad budgets in the next 12 months. Globally, Statista estimates that online video-ad spending will grow 18 percent in 2015 to some $10 billion. Nonetheless, video received very low scores for importance (44) and priority (43), with some exceptions in consumer goods and financial services.

    Display Media. Our research has shown that for display advertisers and their agencies, digital display campaigns that employ programmatic, or automated, buying of advertising placements can achieve big gains in performance—an average 32 percent improvement in cost per action—and in some cases, improvements of more than 50 percent. (See Improving Engagement and Performance in Digital Advertising, BCG Focus, September 2014.) But to achieve these gains in large-scale campaigns, advertisers need to take advantage of the potential to experiment and learn online and make effective use of individuals with advanced digital skills. It does not bode well when marketers rank their current display-media skills at only 49 and the priority they assign to improving these skills dead last (22) among the capabilities and channels we surveyed.

    Testing. One of the great benefits of digital technology is the ability to test just about anything with consumers quickly, easily, and inexpensively—from ad copy to campaigns and offers. In pricing, for example (a complementary function to marketing), the ability to test, learn, and adapt in real time is the basis for dynamic pricing, which, pioneered by Amazon and others, has helped upend the retail business. Marketers, however, are slow and inconsistent in determining how and to what extent to test. Few place a priority on developing their testing skills (44)—a serious oversight or miscalculation, in our opinion.

    Other Skills. Marketers give some digital skills, such as marketing analytics, digital-content creation, and digital targeting, higher marks for business importance and skills development, but even these scores (which fall into the 55-to-65 range) trail the realities of the marketplace. Big data, branded content, and targeting consumers for advertising delivery based on digital behavior are three of the biggest trends in marketing today. Other key skills, such as partner management and metrics and measurement, score even lower for importance and as an L&D priority.